Understanding Expected Value (EV) in Sports Trading

Understanding Expected Value (EV) in Sports Trading | SportsTrade

April 03, 2025, by Toby Banks

Understanding Expected Value (EV) in Sports Trading

One of the most important concepts in sports trading is Expected Value (EV). It’s the mathematical foundation for long-term profitability, and every successful trader uses it—whether they realize it or not. Understanding EV helps you make smarter trades, avoid emotional decisions, and focus on outcomes that truly offer value. In this article, we’ll break down what EV is, how to calculate it, and how to use it in your trading strategy.

1. What Is Expected Value (EV)?

Expected Value is a formula used to determine how much you can expect to win or lose per bet on average over time.

The formula:

EV = (Probability of Win x Amount Won per Bet) - (Probability of Loss x Amount Lost per Bet)

A positive EV (+EV) means the bet is profitable in the long run. A negative EV (-EV) means you’re expected to lose money over time.

2. Why EV Matters in Sports Trading

It shifts your focus from "winning now" to long-term profitability.
It removes emotion and guesswork from decision-making.
It allows you to spot value trades others may miss.
It helps build a consistent, data-driven strategy.

3. How to Calculate EV in Practice

Let’s say you believe a football team has a 60% chance to win a match.

Bookmaker odds: 2.10 (decimal)
Stake: $100

EV = (0.60 x $110) - (0.40 x $100) = $66 - $40 = +$26

In this case, you expect to win $26 per trade on average over time. That’s a +EV bet.

Tip: Use your own probability estimates (based on data) rather than relying solely on bookmaker odds.

4. How to Estimate True Probabilities

This is where the skill of a trader comes in.

Use team form, injuries, historical matchups, and advanced stats (like xG).
Compare multiple bookmakers to identify mispriced odds.
Track public sentiment to spot overvalued favorites.

Even a small edge (e.g., 2-3% discrepancy between true odds and market odds) can make a huge difference over hundreds of trades.

5. Common Mistakes Traders Make with EV

Overestimating your ability to assign accurate probabilities
Chasing negative EV bets during losing streaks
Confusing short-term wins with long-term profitability
Not factoring in commissions or exchange fees

6. Using EV to Build a Long-Term Trading Strategy

Only take trades with positive EV based on your model or research.
Avoid emotional trades or betting on your favorite teams.
Combine EV with bankroll management to maximize ROI and reduce variance.

Pro tip: Record your EV assumptions and actual outcomes. Over time, this sharpens your accuracy and improves decision-making.

Conclusion

Expected Value (EV) is the core principle that separates professional sports traders from casual bettors. By understanding and applying EV, you can remove emotion, spot profitable trades, and build a strategy that thrives over the long run.

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